Nokia announces its third-quarter earnings on Thursday. With so many lemons, why is it not making any lemonade?

Image: CNET

Analysts are pegging the upcoming earnings results as the "make or break quarter" for Nokia, which has struggled in the past couple of years with poor Windows Phone 8 device sales.

Nokia is expected to lose €0.04 ($0.05 cents) per share on revenue of €6.63 billion ($8.73bn). According to analysts, cash is expected to settle at €3.7 billion ($4.87bn) compared to €4.4 billion ($5.79bn) at the fourth-quarter count.

It's not a great picture, but Nokia can stay afloat a little longer. The trouble is that Nokia's Windows Phone strategy remains unclear and has, at this point, little direction, except for an attempt to flood the market.

There are two things to look out for when the earnings break on Thursday:

The (continued) burn rate of how much Nokia is churning through its cash reserves, as a result of declining revenue and overall profits

The range of Lumia devices that the Finnish phone maker has on the market has been widely considered as the last gasp of air the company will breathe, with a string of quarterly losses and a declining cash pile.

Of all things to look out for, it's Lumia sales. Supply was generally problematic during the first quarter, although a growth in the number of regions selling the Windows Phone-powered Lumia may have boosted numbers.

Analysts are expecting between 4.8 and 5.8 million Lumia devices sold during the three-month period ending March 31.

With the majority of devices being sold expected to run the latest Windows Phone 8 software — compared to the fourth quarter, which was largely driven by the discounted Windows Phone 7.5-powered Lumia 800 — it's hoped that Nokia's continued Windows Phone 8 strategy may be enough to carry it on in subsequent quarters.

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What's preventing Nokia from sinking further is an emerging market grasp on the Asha and Symbian-based devices that still remain popular in certain parts of the world.

The latest comScore figures show that Symbian's market share remains flat. While Nokia had been hoping that Symbian figures continued to decline in favor of the higher-profit devices, Symbian's market share remains flat month on month.

Nokia is still expected to sell around 72 million devices in total during the first quarter, down around 20 percent year on year, with Lumia devices taking just 7 percent.

Analysts are expecting the gross margins of Nokia's Smart Device unit — which includes the Lumia range of devices — to increase sequentially, due largely to a lower mix of low or negative margin Symbian devices compared to the fourth quarter.

The bottom line: Nokia has all the lemons, but will likely make little lemonade. Windows Phone is a strong platform, and reviewers have fawned over the Lumia hardware. But by failing to keep ahead of the curve, Nokia has fallen behind out of sight, and can only be heard by its faint whispers at a distance.

Nokia's recovery — if there will be one — will start now, or never. There are only so many times we can keep cheering on the guy at the back of the race.